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It's time for intervention

Make no mistake: it's open season on accountants. As if Enron and Andersen was not enough, the last couple of weeks alone has seen a minority shareholder in Russian oil giant Gazprom take legal action against PricewaterhouseCoopers, claiming the auditor 'contradicted the facts', while Ernst & Young has been served a £2.6bn lawsuit by former audit client Equitable Life over alleged negligence.

And this week we reveal serial City litigants from Class Law are planning two further actions that are likely to involve accountants.

The first involves an action against the government for its handling of the foot-and-mouth crisis. This will involve accountants – although it is accountants from blighted areas that will be among those pursuing the action.

The other case is more in the spirit of the times. It involves split investment trusts – a hugely complicated financial vehicle – that, Class Law claims, have been promoted to an unsuspecting investment community with little thought of consequence by accountants and other financial advisers.

Whatever the merits of the case, it demonstrates, for the rest of the year at least, legal action and the accountancy profession will never be far apart.

The reasons are familiar: depth of pocket and the old expectations gap chief among them.

But while in some cases accountants will be culpable, in the majority of cases they will not. That is unlikely to see off some of the more speculative actions, however. Actions that will inevitably require Big Five firms to pursue other Big Five firms in search of financial redress.

In search of a solution we hark back to our manifesto published in January – before the full horror of the Enron situation became apparent. Surely it is time for an independent body to assess damages in cases pursued against auditors.